6. Strict Management and Oversight
1. Strengthening management of social organization founders. Civil affairs departments must work in conjunction with relevant departments to establish management systems for the holding of office of, formal talking to, issuance of warnings to, ordered change of, and prohibiting of activities of persons responsible for social organizations, and implement a system for the auditing of legal representatives leaving office. We will establish records of the negative behavior of responsible persons, strengthening holding the people responsible for social organizations to account for mistakes, and in the instance of serious violations, order the change of persons and hold them to account in accordance with laws and regulations. We will implement a system of public notification prior to a person taking office to become responsible for a social organization, and a system of reporting on the duties of legally responsible persons.
2. Strengthening oversight of social organization funds. We will establish fund oversight mechanisms led by civil affairs departments and participated in by treasury, taxation, auditing, financing, and security departments and agencies, practice the sharing of information on administration of law, and strengthen risk assessment and early warnings. Civil affairs and treasury departments must prompt social organizations to develop sound internally operated management mechanisms, strictly implement state systems related to financial auditing and the use of receipts, and put into action systems for ensuring the transparency of social organizations’ financial information and auditing by certified public accountants.
Treasury departments must strengthen their oversight of and inspections into the situation as regards the implementation by social organizations of policy related to public funds, financial affairs, and auditing; on discovering problems they must issue punishments in accordance with law, and promptly report the matter to civil affairs departments. Tax departments must prompt social organizations to register for tax purposes in accordance with the law, for those social organizations that have not registered with taxation agencies, they must see tax registration procedures are completed within six months of the release of this Opinion; they must strengthen oversight of the non-profit nature of social organizations, undertaking strict examination to see that they fulfil the criteria for enjoying preferential tax policies for non-profit organizations, and implement a system whereby non-profit income is not taxed but reported and tax is paid on operational income in accordance with the law; they must strengthen tax auditing of social organizations, and in the instance that an organization is in violation by operating for-profit activities, their tax exempt status shall, in accordance with law, be revoked, and it shall be reported to the relevant departments such that the person responsible for the social organization may be punished according to law. Auditing bodies must carry out auditing and oversight over social organizations’ income and expenditure and management and use of state assets.
Financial management departments must strengthen oversight of the bank accounts of social organizations, and monitoring over the incoming and outgoing of funds, particularly in the case of large sums of payments in cash, and must protect against and crack down on money laundering, the funding of terrorism and other illegal and criminal activities. The Bank of China must work in conjunction with the Ministry of Civil Affairs to step up the pace of research on the incorporation of social organizations into anti-money laundering regulatory systems.
3. Strengthening management of social organizations’ activities. Governments at all levels and relevant departments must, according to their functions, work on the basis of a division of labor to strengthen management of social organizations’ internal governance, activities in their respective fields of operation, and overseas exchanges. Civil affairs departments must use methods such as inspections and evaluations to carry out oversight in accordance with the law over social organizations’ responsible persons, funds, activities, information transparency, their implementation of their charters, and so on; establish databases of social organizations which present with suspect behavior and blacklists; strengthen coordination and joint action with relevant departments, linking the genuine performance of social organizations with the tax exemptions they enjoy, the functions they take over in the transformation of government functions and their provision of government-purchased services. Civil affairs departments must work in conjunction with relevant departments to establish systems for joint administration of law, to strictly investigate and punish behavior in violation of laws and regulations, and to act in accordance with the law to close down all types of illegal social organizations that have not registered. Organizations that have been closed down but continue to operate illegally as social organizations, must be dealt with by public security organs in accordance with the law. Industry management departments must incorporate social organizations into the management for that industry; strengthen guidance and oversight over their activities related to that industry; guide the healthy development of social organizations; cooperate with registration and management agencies as they undertake the review and approval of registration for social organizations in their sector; and assist registration and management agencies and other relevant departments in carrying out investigations and deal with the illegal activities of social organizations and illegal social organizations within their sector. Foreign affairs, public security, pricing, and human resources and social security departments must carry out their oversight duties over items and matters relating to social organizations within their fields, investigate and handle in accordance with law violations of laws and regulations, and promptly report such matters to civil affairs departments. Professional supervisory agencies of social organizations subject to dual management, must genuinely and effectively take on their duties as regards items including the thinking and politics, Party building, financial and human resource management, research and related activities, overseas exchanges, and the receipt of overseas donations and funding of the social organizations under their supervision and their carrying out activities in line with their charters; they must organize annual item-specific checks on randomly selected social organizations; and they must assist relevant departments in investigating and handling behavior of social organizations in violation of laws and regulations, supervise, urge, and offer guidance to social organizations with chaotic internal management to put this right, and organize and guide social organizations in dealing with such problems.
4. Standardizing the management of directly registered social organizations. The overall oversight and management, and Party building, foreign related matters, human resource services and so on of directly registered social organizations including industry associations and chambers of commerce, science and technology organizations, public benefit and charitable organizations and urban and rural community service organizations, will be carried out with reference to and following the “Overall Plan for Delinking Industry Associations and Chambers of Commerce from Government Agencies” and accompanying policies; the principle of “whomever is the supervisory agency is the one that is responsible” will be implemented; and effective measures must be taken to exercise stronger oversight both during and after the handling of matters.
For those social organizations including science and technology organizations, public benefit and charitable organizations, and rural and urban community service organizations that have already been established, we will adopt the principle of cautiously moving forward, and steadily carrying out the transition, using piloting to gradually undertake management according to the management methods for directly registered social organizations. The Ministry of Civil Affairs must work in conjunction with relevant departments to develop a plan for carrying out piloting in national level social organizations, and will be responsible for the organization and implementation. Piloting work related to local level social organizations, will, under the unified leadership of provincial (or autonomous region or municipality directly under the central government) Party committees and governments, be the responsibility of civil affairs departments to organize and implement, and plans for piloting are to be researched and designed on the basis of local circumstances. Those localities where conditions allow can explore development on the principle of multiple organizations operating in the same field. Those localities that have already undertaken piloting work must take further steps to improve on this work in line with the spirit of this Opinion.
5. Strengthening social oversight. We encourage and support the news media and the public to engage in oversight of social organizations. The Ministry of Civil Affairs must work in conjunction with the relevant departments to develop and implement information transparency measures for each type of social organization; explore how to establish annual reporting systems for social organizations; and standardize the content of information to be made public, and mechanisms and methods of doing so, thus improving transparency; explore how to establish professional, non-governmental third-party oversight mechanisms, and build sound social organization third-party evaluation mechanisms, ensuring the information from evaluations is made publically available, the procedures used are fair, and the results are just; and establish mechanisms for taking, dealing with, and encouraging complaints against social organizations which behave in violation of laws and regulations and illegal social organizations, and notify the public in accordance with the law of the situation as regards administrative punishment and closures.
6. Building sound mechanisms for terminating the operations of social organizations.
In the instance that a social organization is in serious contravention of relevant state laws and regulations, its certificate of registration will be revoked in accordance with the law; in the instance of a social organization having registered on the basis of falsified information, its registration will be revoked; in the case of illegal social organizations that have not gained approval and are acting without authorization in the name of social organizations to engage in activities, they will be closed down in accordance with the law. The social organization liquidation and cancellation system will be improved, ensuring that the assets of social organizations are not misappropriated, divided privately, or embezzled.
7. Standardizing the foreign-related activities of social organizations
We will guide social organizations in launching, in a well-ordered manner, foreign exchanges, participating in non-governmental international organizations, and participating in developing international standards and rules, giving play to the assisting and cooperative role of social organizations in economic, cultural, science and technology, sports and other foreign exchanges, and to their role as important platforms in foreign non-governmental exchanges. We will improve the related registration and management systems, proactively participate in newly established international social organizations, and support the establishment of international social organizations, in service of the development of a new open economy. In the instance that the work of an organization genuinely requires it to establish a branch (or representative) organization overseas, it must go through its professional supervisory agency or the agency responsible for managing its foreign affairs for approval. In the instance that a Party or government official has a genuine need to join, in a private capacity, a foreign specialist or academic organization or take on relevant duties at such an organization, this should be submitted for approval according to the body with jurisdiction over the official and the relevant regulations.
8. Strengthening Social Organizations’ Own Development
1. Building sound social organization legal person governance structures. Model charters will be developed targeted at different types of social organizations and their particular characteristics. Social organizations must, in accordance with legislation and policies and their charters, establish sound institutional arrangements for legal person governance structures, operational mechanisms, and for Party organizations to participate in decision making on major issues within the social organization; improve their systems related to members’ meetings (or member representatives’ meetings), boards of directors and boards of supervisors; implement democratic elections, democratic decision making, and democratic management; build sound internal oversight mechanisms; and build themselves into legal person entities in which powers and responsibilities are clear, operations are coordinated, and checks and balances are effective, enabling them to independently shoulder their legal responsibilities. We will give impetus to social organizations establishing internal dispute mediation mechanisms, put into effect social organization people’s mediation systems, and guide parties involved to solve disputes in accordance with the law using legal channels.
2. Giving full play to the principal role of Party organizations and the exemplary role of Party members. Party organizations in social organizations must focus their work firmly on the fundamental duties for grassroots Party organizations entrusted to them in the CPC Constitution, uniting people, and ensuring the right political orientation of social organizations; must put forward their opinions on major decision making matters of the social organization, on important activities in the social organization’s field, on expenditures involving large sums, on the receipt of large donations, and on the undertaking of foreign related activities, and so on; and must strengthen guidance over Party building in branches of social organizations; and in branch organizations where conditions allow must urge the establishment of a Party organization. As regards national or transregional social organizations that are not based in Beijing or have established branch organizations, with the exception of those that, in accordance with relevant regulations, are to have their Party leadership strengthened by Party organs of bodies directly under the central Party, Party organs of central government agencies, or the Party Committee of the State-Owned Assets Supervision and Administration Commission of the State Council, Party committees in the locality in which main organizations or branch organizations are based should, according to the requirement for vertical and horizontal integration, strengthen day-to-day guidance and oversight by Party organizations over the social organization and its branch organizations. Secretaries of Party organizations within social organizations are, ordinarily, chosen internally within the social organization; we recommend that persons responsible for social organizations who are Party members act as the secretaries of the Party organizations. In the instance that a social organization is relatively large in scale, has a large number of members, or has no suitable candidate to become the Party secretary of the Party organization, a higher level Party organization may, according to regulations, select and appoint the Party secretary. We will proactively launch activities related to Party member pioneering positions, Party member responsibility areas, and Party member public promises. We will give attention to cultivating and developing new Party members amongst persons responsible for social organization, the management teams of social organizations, and their core professional technical staff. We will persevere in using Party building to help promote the development of people’s organizations, giving impetus to the establishment of labor unions, Communist Youth League organizations, and women’s federation organizations in those social organizations where conditions permit. We will support labor unions in representing workers to oversee the implementation of relevant laws, regulations and policies by social organizations.
3. Strengthening efforts to build social organization honesty and self-regulation. We will drive forward the development of a system of pledges of honesty by social organizations, and establish mechanisms for different industries to reward honesty and discipline dishonesty. We will support social organizations in establishing systems of standards for measuring social responsibility and for actively fulfilling social responsibilities. We will guide social organizations in establishing impact assessment mechanisms for their activities, and their prior reporting to relevant government departments on important matters that could potentially bring social risk. We will strengthen the sense among social organizations of the need to manage and serve; the establishment of organizations and development of memberships by social groups should be in keeping with their ability to manage and serve. We will explore the establishment in different fields of social organization industry-wide self-regulatory alliances, using different methods, such as issuing endorsements in the public interest, designing codes of conduct for activities, and putting into effect reputation-based evaluations, to guide and standardize the behavior of social organizations within the industry. We will standardize the behavior of social organizations as regards receipt of payments, strictly prohibiting the arbitrary collection of fees under fabricated pretexts, and effectively prevent against the phenomena of collecting fees but not providing the corresponding services or management.
4. Driving forward the separation of government and society in social organizations. We will support social organizations in practicing self-restriction and self-management, and give play to their role in providing services, reflecting demands, regulating behavior, and promoting harmony. We will implement the “Overall Plan for Delinking Industry Associations and Chambers of Commerce from Government Agencies,” and prudently begin piloting delinking. With the exception of cases where there are specific provisions in legislation, government departments must not authorize or entrust social organizations to carry out government review and approval. For those items the State Council has determined are no longer to be subject to government review and approval, those departments formerly in charge of such review and approval must not, in any shape or form, appoint industry associations or chambers of commerce to continue to carry out review and approval. We will strictly implement the “General Office of the Central CPC Committee and the General Office of the State Council Notice on Not Permitting Officials from Party and Government Organs to Hold Concurrent Leadership Positions in Social Groups,” and the “Organization Department of the Central CPC Committee Notice on Creating Standards for Officials who have Retired from or Left their Posts Taking on Roles in Social Groups,” and strictly standardize the practice of public servants taking on positions as the leaders of social groups; in special cases when there is a genuine need for them to take up such roles, the case in question will be submitted to the body with jurisdiction over that public servant to undertake a strict process of approval, but ordinarily the holding of more than one such concurrent post will not be permitted. Those in active service as public officials may not take up concurrent posts as the directors of foundations or social service organizations, and in instances where a public servant in active service is already holding such a concurrent position, they must, within six months of the release of this Opinion, resign from their post as a public servant or resign from their duties at the social organization.
9. Strengthening Party Leadership Over the Work of Social Organizations
1. Improving leadership systems. All levels of Party committees and government must place the improvement of social organization management on their agendas of important tasks, and it will be incorporated in local Party committee and government performance assessments and in the test and assessment system for the comprehensive maintenance of law and order. Local Party committees and governments must establish and improve, research and make decisions on major issues and institutions regarding the work of social organizations; the standing committees of Party committees should periodically hear reports on the work of social organizations. Party organizations (Party committees) of each department must strengthen organizational leadership in their work relating to the management of social organizations; implement responsibility systems for Party building work; determine the provisions for management for their respective departments; ensure complete and strong forces are in place for such management; and work effectively to urge and oversee implementation. The central authorities will establish mechanisms for coordinating work on social organizations, and all local levels must establish corresponding mechanisms for carrying out overall coordination, planning, coordinating and guiding work on social organizations, and promptly studying and solving any problems that emerge in such work. We will attach importance to and strengthen the improvement of Party and government conduct and anti-corruption work relating to social organizations, and improve the mechanisms for punishing and preventing against social organization related corruption.
2. Driving forward effective coverage of social organizations by Party organizations and Party work. In accordance with the principle of where Party building should take place all efforts should be made to see it carried out, we will step up the intensity of Party building in social organizations, achieving complete coverage by Party organizations and Party work. In those social organizations where for the time being the right conditions are not in place for establishing Party organizations, persons may be selected and appointed to guide Party building work, or to act as liaison officers, or workers’ unions and Communist Youth League organizations may be established to carry out the work of the Party; when the right conditions are in place, Party organizations should promptly be established. When a new social organization is being established, where conditions permit, a Party organization should be established at the same time. With the approval of the Central Party Committee, important national social organizations may establish Party bodies. All relevant departments should, while carrying out work related to the registration, inspection, evaluation, and everyday oversight of social organizations, urge and prompt social organizations to promptly establish Party organizations and carry out Party work.
3. Strengthening the foundations for ensuring social organization Party building. We will give impetus to the establishment of multiple channels for and diverse forms of investment for putting in place the foundations to ensure Party building work, promote the sharing of resources and joint building and mutual encouragement between Party organizations in enterprises and public institutions, government agencies and sub-district offices and at community level, in counties, townships and villages and the Party organizations of social organizations, creating the right conditions for Party organizations to undertake their activities and play their roles. Based on realistic considerations, social organization Party organization secretaries and full-time staff working on Party matters should be given appropriate subsidies. We will strengthen efforts to educate the directors of social organizations of the politics and thinking of the Party, and guide them in proactively supporting Party building work. We will give impetus to the inclusion of Party building in the charters of social organizations.
10. Proper Organization and Implementation
1. Working more quickly on the development of legislation. We will speed up work on amending and releasing the regulations on the registration and management of social groups, foundations, and non-governmental non-enterprise units. We will research and develop individual pieces of legislation on voluntary services, industry associations and chambers of commerce and so on. We will work faster to research and debate launching, in a timely manner, work on researching and drafting a social organization law. We will encourage and support those localities where conditions allow to introduce local regulations and local government charters based on the spirit of this Opinion.
2. Strengthening capacity building for service and management. All relevant departments and all levels of local government must carry out management by providing services, strengthen the development of people capable of managing and serving social organizations, ensure that there are complete and strong forces in place for this work, to ensure that there are people to manage every matter and people to take responsibility for every duty. Civil affairs departments at every level, particularly at the county level, must have specific agencies for and people in charge of day-to-day work related to the registration and management of social organizations. We will focus particular attention on strengthening the ranks of those charged with administering the law, ensuring the funding for their work, making sure their services are carried out properly, their administration of the law stands up, and their oversight is effective. We will work more quickly to develop information systems for national social organization management and social organization credibility information management platforms, and give impetus to the development of databases of social organization legal persons, strengthening our capacity to oversee and serve social organizations.
3. Strengthening promotion and guidance. We will make full use of publications, radio broadcasting, television, online and other media to broadly promote the positive role of social organizations participating in social development and governance; we will promptly summarize, communicate, and promote exemplary cases of work by social organizations; strengthen theoretical research on social organizations and the development of social organization culture; and strengthen public knowledge and understanding of social organizations, to create a positive social environment in which for social organization reform and development to take place.
4. Ensuring supervisory work and implementation is carried out to good effect. Every provincial (or autonomous region or municipality directly under the central government) Party committee and government must, taking into account local context, develop local measures (opinions) for the concrete implementation of social organization management institutional reform, and must carry out related organizational and implementation work. Relevant departments must, in accordance with the requirements and divisions of labor set out in this Opinion, work quickly to develop and implement related complementary policies, measures, and detailed management regulations, and ensure work related to social organization reform that falls within their own systems is done to good effect. The Ministry of Civil Affairs must work in conjunction with relevant departments to oversee and inspect the enforcement of this Opinion, to ensure that all duties are put properly into effect.